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Vietnam Telecommunications Report Q1 2011
Business Monitor International, Feb 2011, Pages: 98
The Vietnam Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Vietnam's telecommunications industry.
BMI has incorporated the latest data from Vietnam’s General Statistics Office and the Ministry of Information and Communications (MIC) in an update on Vietnam’s telecommunications market. Several revisions have been made to the mobile and fixed-lines forecasts and the forecast period has been extended to 2015.
Vietnam’s mobile growth rate slowed in H210 largely because of the country’s high mobile penetration rate, which has led BMI to revise the five-year mobile forecast for Vietnam downwards. That said, the mobile penetration rate is still expected to surge past the 200% mark in 2011 when the subscriber base reaches a total of 184.492mn. However, BMI continues to believe that this figure is not representative of the true situation in Vietnam as it is thought that operators are reluctant to deduct inactive subscriber SIM cards, which would reduce their market shares.
Meanwhile, the number of fixed-lines in the country held stable at 16.4mn from August to November 2010. The industry grew by 27.4% year-on-year to reach a peak of 20mn in May 2010 but has since declined steadily. Strong competition and aggressive pricing in Vietnam’s mobile sector have accelerated the fixed-to-mobile service migration. The industry is now expected to grow slightly in the near future as a result of investments from fixed-line players, but the numbers are expected to trend downwards in the five year forecast.
The MIC said overcrowding in Vietnam’s mobile market has led to intense competition and declining profitability, which has jeopardised operators' long-term sustainability. However, the regulator has not taken concrete steps to improve the situation. In fact, the regulator is instead contemplating implementing mobile number portability (MNP) in the country and could release a set of guidelines in 2011. BMI believes that benefits of MNP are best reaped in countries where the industry has matured and is experiencing stagnant growth as a result. This is not the case in the Vietnamese market, even though the mobile penetration rate for the country is among the highest in the Asia-Pacific region.
Vietnam is in 17th place in BMI’s latest Business Environment Ratings with a Telecoms Rating of 42.2. There were no changes to the country’s individual scores as Vietnam stayed ahead of Sri Lanka in the table. Given that intense competition has negatively affected Vietnam’s ARPU levels and the country’s mobile market is fast-approaching saturation, BMI sees little opportunity for Vietnam to move up the table.
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